Connecticut's budget now $417 million in the red

Updated 4:01 pm, Thursday, December 6, 2012

As the current budget shortfall rose to $417 million on Monday, minority Republicans in the General Assembly said they will offer fresh ideas for savings when they meet with Gov. Dannel P. Malloy's budget chief.

Senate Minority Leader John McKinney, R-Fairfield, said he will suggest that dozens of agency heads and departmental commissioners give up 5 or 10 percent of their six-figure salaries.

"It would send a message to the public that we're willing to make sacrifices," McKinney said in a phone interview. "We know that with 9 percent unemployment, people all over the state are making sacrifices of their own."

"Ben Barnes has talked about discussing a framework and process going forward," McKinney said. "I'm not sure if we're going to exchange plans. I don't expect he's going to come with anything solid, because at this point he and the governor are trying to reach an overall number for their deficit mitigation plan."

Last week, Barnes and Malloy announced $123 million in unilateral cuts, but they need the General Assembly to act on a larger package of spending reductions that would also roll over and prepare the state for an anticipated $1.1 billion deficit in the $20 billion budget set to take effect next July 1.

McKinney said he hopes that the governor will be using Lembo's $417 million estimate, about 12 percent higher than OPM's projection.

"We disagree with the number the comptroller is using today," Occhiogrosso said in a statement.

"However, the governor, comptroller, and it seems legislators, all agree there is a current-year shortfall that needs to be addressed before the end of the calendar year," Occhiogrosso said. "The deficit mitigation plan the governor will propose within the next couple of weeks will, based on the best available data at the time, bring the current year budget into balance."

Lembo, in a letter to the governor on Monday, said the shortfall was burgeoning because of higher-than-anticipated spending in the Department of Social Services.

"Statewide agency appropriations projected to year end are running above their appropriated levels even after consideration of OPM's estimated deficiency appropriations," Lembo wrote. "Medicaid -- the largest single gross appropriation line-item in the budget -- is significantly above the budget target. Medicaid experienced double-digit increases last year and many of those trends are continuing this fiscal year, according to data from the Department of Social Services."

Lembo said more risk factors in the budget include costs from Superstorm Sandy, which OPM is tabulating, and potential federal budget reductions.

"I am also concerned that other national and international economic factors could further erode the consensus revenue forecast," Lembo said. "I will be closely monitoring any changes in these areas. Projected state spending above budgeted levels, and the slow pace of national economic recovery are impeding the state's ability to bring the budget into balance. Economic indicators are below the levels normally observed at this stage of a recovery."

A special legislative session is expected before the end of the year.

McKinney said that Republicans are prepared to offer parts of their recent alternative budgets that were rejected in recent years by majority Democrats in the House and Senate. The GOP proposals included the privatization of some state functions and the executive level salary givebacks.

The Malloy administration contends that there are fewer high-level state employees than previous administrations and that departmental staffs are smaller, so executive pay cuts aren't warranted.

"We've looked at pay cuts for both elected and appointed officials in the 5 percent to 10 percent range," McKinney said. Rank-and-file lawmakers make $28,000, plus expenses, in the 151-member House and 36-member Senate.

"Obviously they're not going to solve the overall crisis, but what I hear most when I travel around is `when are you guys in Hartford going to get it?' " McKinney said. "This could show we're ready to make sacrifices."